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Ever-Glory Reports Second Quarter 2021 Financial Resultsnew

Add: 2021   Update: 2021/08/13

 Ever-Glory Reports Second Quarter 2021 Financial Results

NANJING, China, August 13, 2021 /PRNewswire/ -- Ever-Glory International Group, Inc. (the “Company” or “Ever-Glory”) (NASDAQ: EVK), a retailer of branded fashion apparel and a leading global apparel supply chain solution provider, reported its financial results today for the second quarter ended June 30, 2021.

Mr. Yihua Kang, Chairman, President and Chief Executive Officer of Ever-Glory, said, “During the second quarter, we maintained our focus on developing the retail business through our multi-brand strategy and store network optimization initiative, while improving our wholesale business by upgrading customer portfolio and enhancing our account receivables.”

“During the second quarter of 2021, our retail brands continue to attract new customers and retain existing customers by focusing on design, quality and value,” Mr. Kang continued. “Following the remodeling or relocation of 66 stores during 2021, we operated a nationwide network of 931 stores as of June 30, 2021.”

“Looking at our wholesale business, we maintained focus on upgrading customer portfolio to reduce credit risk and improve margin in light of weak micro-environment and enhancing our account receivables. Going forward, we’ll implement a stricter client evaluation system and remain diligent in our account receivables collection. We believe the enduring strength of our wholesale business will support its long-term profitability, Mr. Kang concluded.

Mr. Jason Jiansong Wang, Chief Financial Officer of Ever-Glory, added, “The second quarter results are coupled with our ability to increase operating leverage. Going forward, we remain confidence in the long-term prospects of our business and we will continue implementing our margin enhancement and cost control measures to further strengthen the profitability of our business.”

Second Quarter 2021 Financial Results 

Total sales for the second quarter of 2021 were $60.6 million, an increase of 20.9% from $50.1 million in the second quarter of 2020. This increase was primarily driven by a 19.9% increase in our wholesale business and a 21.7% increase in retail business.

Sales for the Company’s branded fashion apparel retail division increased by 21.7% to $34.1 million for the second quarter of 2021, compared with $28.0 million for the second quarter of 2020. This increase was primarily due to the increase in same-store sales. The Company operated 931 retail stores as of June 30, 2021, compared with 935 retail stores as of June 30, 2020.

Sales for the Company’s wholesale division increased by 19.9% to $26.4 million for the second quarter of 2021, compared with $22.0 million for the second quarter of 2020. This increase was primarily attributable to increased sales in Mainland China, Hong Kong, the United Kingdom, and other European markets partially offset for decreased sales in Japan and the United States.

Total gross profit for the second quarter of 2021 increased by 27.3% to $18.4 million, compared with $14.4 million for the second quarter of 2020. Total gross margin for the second quarter of 2021 increased to 30.4% from 28.8% for the second quarter of 2020.

Gross profit for the retail business increased by 46.7% to $14.8 million for the second quarter of 2021, compared with $10.1 million for the second quarter of 2020. Gross margin for the second quarter of 2021 was 43.4% compared to 36.2% for the second quarter of 2020.

Gross profit for the wholesale business decreased by 17.5% to $3.6 million for the second quarter of 2021, compared with $4.4 million for the second quarter of 2020. Gross margin for the second quarter of 2021 decreased to 13.6% from 19.7% for the second quarter of 2020.

Selling expenses for the second quarter of 2021 increased by 14.9% to $14.5 million, or 24.0% of total sales, compared with $12.6 million, or 25.2% of total sales for the second quarter of 2020. The increase was attributable to the increased marketing expenses associated with the promotion of the retail brand.

General and administrative expenses for the second quarter of 2021 increased by 28.3% to $7.7 million, or 12.7% of total sales, compared with $6.0 million, or 11.9% of total sales for the second quarter of 2020. The increase was attributable to the decreased business trip and the exemption of social benefits by the PRC government during the COVID-19 outbreak in China 2020.

Loss from operations was $3.7 million for the second quarter of 2021, compared to $4.2 million for the second quarter of 2020.

Net loss attributable to the Company for the second quarter of 2021 was $1.8 million compared with $3.8 million for the second quarter of 2020. Basic and diluted loss per share were $0.12 for the second quarter of 2021 compared with $0.26 for the second quarter of 2020.

Balance Sheet 

As of June 30, 2021, Ever-Glory had approximately $64.0 million of cash and cash equivalents, compared with approximately $81.9 million as of December 31, 2020. Ever-Glory had working capital of approximately $48.9 million as of June 30, 2021, and outstanding bank loans of approximately $65.5 million as of June 30, 2021.

Conference Call

The Company will hold a conference call at 8:00 a.m. Eastern Time on August 13, 2021(8:00 p.m. Beijing Time on August 13, 2021). Listeners can access the conference call by dialing +1-800-263-0877 or + 1-646-828-8143 and using the access code 2633372. The conference call will also be webcast live over the Internet and can be accessed at the Company’s website at http://www.everglorygroup.com.

A replay of the call will be available from 11:00 a.m. Eastern Time on August 13 through 11:59 p.m. Eastern Time on August 20 by calling +1-844-512-2921 or +1-412-317-6671 with pin number 2633372.

About Ever-Glory International Group, Inc.

Based in Nanjing, China, Ever-Glory International Group, Inc. is a retailer of branded fashion apparel and a leading global apparel supply chain solution provider. Ever-Glory is the first Chinese apparel Company listed on the American Stock Exchange (now named as NYSE MKT) in July 2008 and then transferred to The NASDAQ Global Market on December 31, 2015. Ever-Glory offers apparel to woman in China under its own brands “La go go”, “Velwin” and “idole”. Ever-Glory is also a leading global apparel supply chain solution provider with a focus on middle-to-high end casual wear, outerwear, and sportswear brands. Ever-Glory services a number of well-known brands and retail stores by providing a complete set of supply chain management services, including: fabric development and design, sampling, sourcing, quality control, manufacturing, logistics, customs clearance and distribution.

Forward-Looking Statements

Certain statements in this release and other written or oral statements made by or on behalf of Ever-Glory International Group, Inc. (the “Company”) are “forward looking statements” within the meaning of the federal securities laws. Statements regarding future events and developments and the Company’s future performance, as well as management’s expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. The forward looking statements are subject to a number of risks and uncertainties including, without limitation, market acceptance of the Company’s products and offerings, development and expansion of the Company’s wholesale and retail operations, the Company’s continued access to capital, currency exchange rate fluctuation and other risks and uncertainties. The actual results the Company achieves (including, without limitation, the results stemming from the future implementation of the Company’s strategies and the revenue, net income and new retail store projections set forth herein) may differ materially from those contemplated by any forward-looking statements due to such risks and uncertainties (many of which are beyond the Company’s control). These statements are based on management’s current expectations and speak only as of the date of such statements. Readers should carefully review the risks and uncertainties described in the Company’s latest Annual Report on Form 10-K and other documents that the Company files from time to time with the U.S. Securities and Exchange Commission. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

For investor and media inquiries, please contact:

Ever-Glory International Group

Dandan Song

Tel: +86-25-5209-6817

E-Mail: sdd@ever-glory.com.cn

 

  

 

 


EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In thousands of U.S. Dollars, except share and per share data or otherwise stated)

 

 

 

June 30,
2021

 

 

December 31,
2020

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

Cash and cash equivalents

 

$

63,963

 

 

$

81,865

 

Restricted cash

 

 

42,725

 

 

 

39,858

 

Trading securities

 

 

3,581

 

 

 

1,792

 

Accounts receivable, net

 

 

39,643

 

 

 

53,285

 

Inventories

 

 

60,190

 

 

 

53,893

 

Advances on inventory purchases

 

 

7,556

 

 

 

10,261

 

Value added tax receivable

 

 

2,114

 

 

 

1,244

 

Other receivables and prepaid expenses

 

 

6,255

 

 

 

5,479

 

Amounts due from related parties

 

 

186

 

 

 

567

 

Total Current Assets

 

 

226,213

 

 

 

248,244

 

 

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

 

 

 

 

Equity security investment

 

 

5,929

 

 

 

3,932

 

Intangible assets, net

 

 

4,750

 

 

 

4,794

 

Property and equipment, net

 

 

33,414

 

 

 

32,164

 

Operating lease right-of-use assets

 

 

49,725

 

 

 

41,690

 

Deferred tax assets

 

 

306

 

 

 

902

 

Total Non-Current Assets

 

 

94,124

 

 

 

83,482

 

TOTAL ASSETS

 

$

320,337

 

 

$

331,726

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Bank loans

 

$

65,498

 

 

$

65,919

 

Accounts payable

 

 

52,595

 

 

 

67,762

 

Accounts payable and other payables – related parties

 

 

2,131

 

 

 

3,764

 

Other payables and accrued liabilities

 

 

15,410

 

 

 

16,073

 

Value added and other taxes payable

 

 

-

 

 

 

909

 

Income tax payable

 

 

493

 

 

 

1,062

 

Current operating lease liabilities

 

 

41,174

 

 

 

33,481

 

Total Current Liabilities

 

 

177,301

 

 

 

188,970

 

 

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

 

 

 

 

 

Non-current operating lease liabilities

 

 

8,676

 

 

 

8,307

 

TOTAL LIABILITIES

 

 

185,977

 

 

 

197,277

 

 

 

 

 

 

 

 

 

 

COMMITMENTS AND CONTINGENCIES (Note 9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Common stock ($0.001 par value, authorized 50,000,000 shares, 14,810,660 and 14,809,160 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively)

 

 

15

 

 

 

15

 

Additional paid-in capital

 

 

3,655

 

 

 

3,650

 

Retained earnings

 

 

106,230

 

 

 

109,171

 

Statutory reserve

 

 

20,376

 

 

 

20,376

 

Accumulated other comprehensive income

 

 

6,672

 

 

 

4,590

 

Amounts due from related party

 

 

(2,588

)

 

 

(3,353

)

Total equity

 

 

134,360

 

 

 

134,449

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

 

$

320,337

 

 

$

331,726

 

 

 

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited)

(In thousands of U.S. Dollars, except share and per share data or otherwise stated)

 

 

 

Three months ended

 

 

Six months ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

NET SALES

 

$

60,555

 

 

$

50,086

 

 

$

131,369

 

 

$

108,441

 

COST OF SALES

 

 

42,163

 

 

 

35,641

 

 

 

90,541

 

 

 

77,958

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GROSS PROFIT

 

 

18,392

 

 

 

14,445

 

 

 

40,828

 

 

 

30,483

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling expenses

 

 

14,503

 

 

 

12,626

 

 

 

30,052

 

 

 

26,105

 

General and administrative expenses

 

 

7,662

 

 

 

5,971

 

 

 

15,513

 

 

 

11,755

 

Total Operating Expenses

 

 

22,165

 

 

 

18,597

 

 

 

45,565

 

 

 

37,860

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS FROM OPERATIONS

 

 

(3,773

)

 

 

(4,152

)

 

 

(4,737

)

 

 

(7,377

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSES)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

527

 

 

 

339

 

 

 

752

 

 

 

616

 

Interest expense

 

 

(200

)

 

 

(566

)

 

 

(692

)

 

 

(907

)

Government subsidy

 

 

243

 

 

 

231

 

 

 

502

 

 

 

691

 

Gain from changes in fair values of investments

 

 

2,041

 

 

 

4

 

 

 

2,275

 

 

 

4

 

Other income

 

 

477

 

 

 

610

 

 

 

774

 

 

 

968

 

Total Other Income, Net

 

 

3,088

 

 

 

618

 

 

 

3,611

 

 

 

1,372

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS BEFORE INCOME TAX EXPENSE

 

 

(685

)

 

 

(3,534

)

 

 

(1,126

)

 

 

(6,005

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

(1,086

)

 

 

(266

)

 

 

(1,815

)

 

 

(493

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

 

(1,771

)

 

 

(3,800

)

 

 

(2,941

)

 

 

(6,498

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to the non-controlling interest

 

 

-

 

 

 

6

 

 

 

-

 

 

 

3

 

NET LOSS ATTRIBUTABLE TO THE COMPANY

 

 

(1,771

)

 

 

(3,794

)

 

 

(2,941

)

 

 

(6,495

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET LOSS

 

$

(1,771

)

 

$

(3,800

)

 

$

(2,941

)

 

$

(6,498

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation gain (loss)

 

 

3,434

 

 

 

(263

)

 

 

2,083

 

 

 

(1,700

)

COMPREHENSIVE INCOME (LOSS)

 

 

1,663

 

 

 

(4,063

)

 

 

(858

)

 

 

(8,198

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive loss attributable to the non-controlling interest

 

 

-

 

 

 

8

 

 

 

-

 

 

 

2

 

COMPREHENSIVE INCOME  (LOSS) ATTRIBUTABLE TO THE COMPANY

 

$

1,663

 

 

$

(4,055

)

 

$

(858

)

 

$

(8,196

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LOSS PER SHARE ATTRIBUTABLE TO THE COMPANY’S STOCKHOLDERS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.12

)

 

$

(0.26

)

 

$

(0.20

)

 

$

(0.44

)

Weighted average number of shares outstanding Basic and diluted

 

 

14,810,660

 

 

 

14,804,832

 

 

 

14,810,330

 

 

 

14,804,595

 

 

 

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Unaudited)

(In thousands of U.S. Dollars, except share and per share data or otherwise stated)

 

 

 

 

 

 

Additional

 

 

Retained Earnings

 

 

Accumulated
other

 

 

Amounts
due from

 

 

Total
equity
attributable
to stockholders

 

 

Non-

 

 

 

 

 

 

Common Stock

 

 

paid-in

 

 

 

 

 

Statutory

 

 

Comprehensive

 

 

related

 

 

of the

 

 

controlling

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

capital

 

 

Unrestricted

 

 

reserve

 

 

loss

 

 

party

 

 

Company

 

 

Interest

 

 

equity

 

Balance at January  1, 2021

 

 

14,809,160

 

 

$

15

 

 

$

3,650

 

 

$

109,171

 

 

$

20,376

 

 

$

4,590

 

 

$

(3,353

)

 

$

134,449

 

 

 

-

 

 

$

134,449

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock issued for compensation

 

 

1,500

 

 

 

-

 

 

 

5

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5

 

 

 

 

 

 

 

5

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,170

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,170

)

 

 

-

 

 

 

(1,170

)

Net cash received from related party under counter guarantee agreement

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

379

 

 

 

379

 

 

 

-

 

 

 

379

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,352

)

 

 

-

 

 

 

(1,352

)

 

 

-

 

 

 

(1,352

)

Balance at March 31, 2021

 

 

14,810,660

 

 

 

15

 

 

 

3,655

 

 

 

108,001

 

 

 

20,376

 

 

 

3,238

 

 

 

(2,974

)

 

 

132,311

 

 

 

-

 

 

 

132,311

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,771

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,771

)

 

 

-

 

 

 

(1,771

)

Net cash received from related party under counter guarantee agreement

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

386

 

 

 

386

 

 

 

-

 

 

 

386

 

Foreign currency translation adjustment

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3,434

 

 

 

 

 

 

 

3,434

 

 

 

-

 

 

 

3,434

 

Balance at June 30, 2021

 

 

14,810,660

 

 

$

15

 

 

$

3,655

 

 

$

106,230

 

 

$

20,376

 

 

$

6,672

 

 

$

(2,588

)

 

$

134,360

 

 

 

-

 

 

$

134,360

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Retained Earnings

 

 

Accumulated
other

 

 

Amounts
due from

 

 

Total
equity
attributable
to stockholders

 

 

Non-

 

 

 

 

 

 

Common Stock

 

 

paid-in

 

 

 

 

 

Statutory

 

 

Comprehensive

 

 

related

 

 

of the

 

 

controlling

 

 

Total

 

 

 

Shares

 

 

Amount

 

 

capital

 

 

Unrestricted

 

 

reserve

 

 

loss

 

 

party

 

 

Company

 

 

Interest

 

 

equity

 

Balance at January  1, 2020

 

 

14,801,770

 

 

$

15

 

 

$

3,640

 

 

$

106,328

 

 

$

19,939

 

 

$

(4,330

)

 

$

(4,932

)

 

$

120,660

 

 

 

(1,510

)

 

$

119,150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock issued for compensation

 

 

3,062

 

 

 

0.003

 

 

 

5

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

5

 

 

 

 

 

 

 

5

 

Net income (loss)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,701

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2,701

)

 

 

3

 

 

 

(2,698

)

Net cash received from related party under counter guarantee agreement

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

785

 

 

 

785

 

 

 

-

 

 

 

785

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,440

)

 

 

-

 

 

 

(1,440

)

 

 

3

 

 

 

(1,437

)

Balance at March 31, 2020

 

 

14,804,832

 

 

 

15

 

 

 

3,645

 

 

 

103,627

 

 

 

19,939

 

 

 

(5,770

)

 

 

(4,147

)

 

 

117,309

 

 

 

(1,504

)

 

 

115,805

 

Net (loss)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,794

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,794

)

 

 

(6

)

 

 

(3,800

)

Net cash received from related party under counter guarantee agreement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

151

 

 

 

151

 

 

 

 

 

 

 

151

 

Foreign currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(261

)

 

 

 

 

 

 

(261

)

 

 

(2

)

 

 

(263

)

Balance at June 30, 2020

 

 

14,804,832

 

 

$

15

 

 

$

3,645

 

 

$

99,833

 

 

$

19,939

 

 

$

(6,031

)

 

$

(3,996

)

 

$

113,405

 

 

 

(1,512

)

 

$

111,893

 

 

 

 

EVER-GLORY INTERNATIONAL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands of U.S. Dollars, except share and per share data or otherwise stated)

 

 

 

Six Months Ended

 

 

 

June 30,
2021

 

 

June 30,
2020

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

Net loss

 

$

(2,941

)

 

$

(6,498

)